Binance Is Pitching Its Stablecoin as a Government-Friendly Libra Competitor

Crypto exchange Binance is now explicitly positioning its Venus stablecoin project as a government-friendly alternative to Facebook's Libra, just a month after downplaying any suggestions of rivalry between the two.

Last month, when Binance launched the initiative to develop localized stablecoins and digital assets pegged to fiat currencies across the globe, Binance CEO Changpeng Zhao said that if anything, "This should help Libra, if you think about it."

Binance's stance toward Libra seems to have hardened.

"You could say it's a response to Libra, or you could say it's an alternative to libra. I would say it is like a strong competitor to Libra."

Lim said he and his team have been holding conversations with central banks and regulators in developing countries, who he said are concerned that if Libra launches they could lose sovereign authority over their currencies overnight.

The risk to sovereignty is particularly acute if there are problems with inflation and the people opt for Libra instead. "That is basically the message we are sending today," Lim added.

"Some might be saying 'let's try it out', but there are others saying, 'there's no way in hell I will let Libra in my economy.' Of course, the developed countries have the power to block it. But developing countries don't have the financial power to say I'm going to block such a powerful corporation."

Unlike Libra, Venus ensures control over any proposed stablecoin stays with the government issuing it; they decide how to collateralize the coins and how many to mint, said Lim.

Binance's refined sales pitch for Venus comes on the eve of the exchange's expansion into the U.S. and capitalizes on concerns about Libra raised by governments of major economies.

"The monetary sovereignty of states is under threat," French finance minister Bruno Le Maire said last week, vowing to block Libra from launching in Europe.